BCG and AWI say spread the risk with sheep

01 Apr '10

3 min read

With a run of difficult seasons, leading Victorian cropping organisation the Birchip Cropping Group (BCG) is highlighting the positive role livestock can have in spreading the financial risk in a cropping enterprise.

As the wool industry's marketing, research and development body, Australian Wool Innovation (AWI) is keen to highlight the profitability, reliability and dual purpose nature of sheep as part of a mixed farming business.

BCG Chairman Ian McClelland said livestock in many farming systems across the Wimmera Mallee has played an important risk management role over the past 10 years of below average rainfall, particularly on heavier soils. He added how having a Merino flock has helped his family farm through a decade of low grain production and prices in the Mallee.

'Cropping incomes have almost halved here over the past 10 years and it has been livestock and our Merino sheep flock that has kept us in the race. Given the dual purpose nature of a Merino flock we have increased our sheep numbers this year,' Mr McClelland said.

The Grain & Graze research program highlighted how mixed enterprises with more livestock are less likely to incur serious losses in dry seasons, while those with more cropping can make bigger profits in bumper years, although these years seem further and further apart.

Backing this is a recent study of enterprises across south eastern Australia showing sheep have a cost of production about half that of cropping and crop yields are more sensitive to rainfall variability.1 The report concluded sheep reduce the risk and scale of loss compared with continuous cropping.

BCG is also highlighting the importance of flexibility within farming systems as an important risk management strategy.

'The capacity of a farming system to incorporate livestock increases the flexibility of the business to cope and manage climate challenges,' BCG CEO Alexandra Gartmannsaid.

For example in 2009 when grain crops were once again affected by tough climatic conditions, farmers who had livestock were able to capitalise on high lamb prices.

Through the initial years of the Grain & Graze program, the integration of livestock and cropping within a healthy and profitable mixed farm were explored. The project was a joint initiative of AWI, the Grains Research and Development Corporation, Meat & Livestock Australia and Land & Water Australia. The Grain & Graze program's 'Managing Complex Systems' report, available from the AWI website, is a handy resource for any farmer looking to balance production and profitability in a healthy environment with an uncertain climate and markets.

BCG is involved in a Grain & Graze initiative that will see a number of projects coordinated across the Wimmera Mallee, North East and North Central regions of Victoria looking to address improved livestock management in cropping systems.

Australian Wool Innovation Limited (AWI)

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